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The business case for e-commerce.



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The Business Case For E-Commerce More Australian businesses will be encouraged to get online with the release today at a small business in Adelaide, of two reports from the National Office for the Information Economy (NOIE) demonstrating the benefits to business of taking up e-commerce.

The Advancing with E-commerce report sets out a number of small-to-medium enterprises case studies. They demonstrate the main benefits and costs from e-commerce and provide information on the key challenges encountered with its adoption.

The study showed that a large investment was not necessarily required for small-to-medium enterprises to successfully engage in e-commerce. Last year, Color On Demand, a family-owned printing business based in Adelaide, generated $64,800 in additional gross profit and $42,000 in cost savings from a total e-commerce investment of $12,830.

These reports highlight how e-commerce will underpin further growth in the Australian economy by enabling innovation and significant advances in productivity and efficiency within and across industry sectors.

For example, in the pharmaceutical industry a new system for ordering and managing supplies promises to reduce the transaction cost from the $50 to $70 range to an estimated $2 to $5. At the current order transaction volume of 3.8 million per year, the savings are estimated to be about $200 million a year.

The B2B E-Commerce: Capturing Value Online report provides an independent assessment of contemporary developments and issues for the future of business-to-business e-commerce in Australia. It outlines government achievements in this area and discusses NOIE's approach in sectoral e-commerce development.

Key emerging issues for the future of business-to-business e-commerce include the need for collaboration or cooperation on market infrastructure and standards and inter-operability

between electronic exchanges.

These reports are part of a package of measures introduced by the Government to increase the rate of adoption of e-commerce by small businesses. As part of this objective, the Minister for Small Business, the Hon Ian McFarlane, and Senator Alston recently announced that the Federal Government would provide $6.5 million over two years to develop e-commerce information and learning tools and make it easier for small business to trade online with Government agencies.

Media Contact: Sasha Grebe, 02 6277 7480 or 0409 445 246

Website: www.richardalston.dcita.gov.au

242/01 4 October 2001

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